The tax system is one of the main economic indicators of any state. The Republic of Croatia divides its tax system into several parts: state taxes, county taxes, city or municipal taxes, joint taxes, and taxes on winnings from games of chance. This division also includes the tax on holiday homes, which is elaborated in this paper. Also, the paper will deal with the value added tax through the past, and its occurrence in the Republic of Croatia. Thus we find out that the Parliament of the Republic of Croatia on June 21, 1995. made a decision on the promulgation of the Law on Value Added Tax, VAT. The rate has changed over the past, and today three tax rates are in force: the basic rate of 25%, and two reduced rates, of 13% and 5%. Next, the types of taxes are processed, of which the most important are direct and indirect taxes, and their subtypes. In the fourth part of this paper, we get acquainted with holiday homes, the process of taxation of the same, and types of accommodation. The last unit focused on travel agencies, especially the Internet, Airbnb agency, and its specifications. In addition to the part with the theory, the paper has two examples in which the procedures of taxation of holiday homes in the VAT system are explained, as well as several tables, for better understanding.